Narrow Results

We distinguish between “task-warranted” and “task-unwarranted” graduate jobs. For both types, a degree is required but task-warranted graduate jobs involve carrying out typical graduate-level tasks. We operationalize the distinction, using representative surveys of resident Singapore workers. We find that the ongoing fast expansion of higher attainment between 2013 and 2017 was met by a similarly-strong growth in task-warranted graduate jobs. Compared with the matched graduates, the graduates in task-unwarranted graduate jobs and in non-graduate jobs both perceive lower skills utilization. There is a negative wage gap of 18% for graduates in task-unwarranted graduate jobs, and of 31% for underemployed graduates.

Using matched performance data and annual salary data of Japanese professional footballers, we examine the discrepancy between productivity and wages. We find that high productivity, as measured by effort and skill, contributes to raising the probability of winning matches in the Japanese professional football league, but that players’ effort and skills are not well reflected in their wages, with wages sometimes even having a negative influence on performance. Furthermore, we find that players’ attributes, such as experience, are larger drivers of wage levels than effort or skill level. The evidence suggests a seniority-based pay scale in a professional football league in the sense that reputation and “names” have market value. This discrepancy between productivity and wages suggests that there may exist inefficiency in payroll even in the professional labor market.

This study examines the relationship between global value chain (GVC) participation and workers’ wages and the disparities in wage benefits from GVC participation. It employs a pseudo-panel approach to treat endogeneity biases, utilizing pseudo-panel data constructed from the Thai Labour Force Survey, 1995–2011. The results show that GVC participation, on average, induces higher hourly wages through forward and backward linkages. Although forward linkages inclusively and positively affect workers’ wages, the wage benefits of backward linkages accrue to particular demographic groups. Therefore, government policies must be designed to promote GVC participation, particularly forward linkages, and support disadvantaged demographic groups facing disproportionate wage effects.

This paper uses the task-content-of-occupations framework to analyze trends in employment and wages of female and male workers in the Indian labor market from 1994 to 2017. Workers are classified into four main occupational categories: nonroutine cognitive, routine cognitive, nonroutine manual, and routine manual. Decomposing the changes in employment shares into between-industry changes and within-industry changes across occupational categories reveals that within-industry employment changes have increasingly played an important role, suggesting the growing importance of using the task-content framework to analyze labor market trends. The biggest increase in employment shares is for nonroutine cognitive occupations for both female and male workers. The wage analysis reveals that, on average, the gender wage gap has been lowest in routine cognitive occupations for most of the period of analysis. However, the analysis finds no consistent, significant changes in wages based on occupational specialization during the period of analysis.

We develop a general equilibrium endogenous growth model where final goods are produced in either the exporter sector or the importer sector, in order to analyze the short, medium and long-run growth effects of an external demand shock induced by an international crisis, such as the current one. Depending on the policy response, such a shock might (or might not) severely affect competitiveness, wage inequality, the economic growth rate and the technological-knowledge bias. This bias controls the paths towards the new steady state. The model shows that countries with balanced public finances can accommodate the external shock and that the intervention should be prompt, as the delay is costly. Results appear to be supported by empirical evidence.

Using data from the 2010 Graduates Occupational Mobility Survey, this paper examines the wage effects of over-education (OE) among graduates in science, technology, engineering, and mathematics (STEM) disciplines at the early stage of their careers. In the pooled OLS analysis, the negative correlation between OE and wages remains even if we were to estimate an augmented specification where OE is disaggregated according to perceived skill mismatch. However, the pooled OLS estimates are changed dramatically when we control for unobserved individual heterogeneity (i.e., ability) using the panel FE estimation procedure; namely, reduced coefficients in the wage equation compared to pooled OLS estimation.

This study aims to find fresh evidences of the effects of horizontal spillover, trade orientation, and firm characteristics on real wages moderated by five categories of ownership. Based on an exploration of 2007–2015 Vietnamese firm-level data collected by the General Statistics Office of Vietnam, the findings reveal significantly positive effects of horizontal spillover and export orientation on average wages. In contrast, import orientation negatively affects wages. The results are supported by the literature of labor market competition and productivity improvement. Importantly, the effect of horizontal spillovers from FDI and trade on average wage varies significantly across ownership types. Although horizontal spillover and the gender ratio have no overall influence on average wages, they do have negative effects on wages in Vietnamese domestic private. Besides, the firm characteristics such as firms’ real output, capital intensity, market share, and net income are also important predictors for the rise of the firm-level average wage in Vietnam.

I present a model of the health capital investment decision of a firm using a moral hazard framework. Health capital investment increases the probability that a worker is present and productive. The firm cannot verify a worker's health capital investment decision. When a firm invests in health capital, the investment is verifiable because the firm contracts with the insurer. I derive the optimal contract for when the worker and for when the firm invests in health capital. When the firm invests in health capital, the level of investment is higher and wages are less volatile. In my model, firms invest more than workers because of a production externality and because it is less costly to invest in health capital than to compensate the worker for bearing the risk of an uncertain labor realization. This result improves welfare, contrary to the benchmark that workers consume more health care than is efficient ex post when firms provide health insurance. Unlike the benchmark model of a worker and insurer, my model includes a profit maximizing firm, includes an endogenous probability of getting sick, and allows the insurer to set premiums by anticipating the health care investment level of the insured.

We examine the impact of pandemics on equilibrium in an integrated epidemic-economy model with production. Two types of technologies are considered: a neo-classical technology and one capturing the notion of time-to-produce. The impact of a shelter-in-place policy with and without layoffs is studied. The paper documents adjustments in interest rate, market price of risk, stock market and real wage as the epidemic propagates. It shows the qualitative effects of a shelter-in-place policy in the model are consistent with the patterns displayed by the stock market and real wage during the COVID-19 outbreak. Puzzles emerging from the analysis are outlined.

This study examines the relationship between wages and religious affiliation for non-Hispanic whites in the United States before and after the Great Recession, utilising the Panel Study of Income Dynamics 2005 and 2011 data. Wage differentials were estimated at the mean using longitudinal Generalised Least Squares models and along the wage distribution using quantile regressions. The results suggest a strong association between wages and religious affiliation for both men and women during both periods. Before the Recession, wage differentials by religious affiliation followed similar patterns for men and women except that gender differences were apparent for Mormons — women earned lower wages, whereas men earned higher wages than their mainline Protestant counterparts. After the Recession, all groups experienced wage declines at the mean. However, the quantile regression estimates revealed that men at low wages and women at high wages experienced wage decline, while women at low wages and men at median wages experienced wage increases.

It is proposed that wage maximization is one of the fundamental principles of Islamic economics, and should be counter-posed to the profit maximization principle of capitalism. Wage maximization needs to be analyzed for both the macroeconomy as well as for the microeconomy, since wage maximization has to be realized at the level of the firms of the microeconomy. A mathematical model for the Islamic macroeconomy is postulated that determines how to maximize macroeconomic wages. A model for a firm is proposed that pays minimum wages based on macroeconomic wage maximization. Wages can be further augmented by wages having a variable component based on profit and loss sharing by the workers with the firm, and which entails a degree of risk. Fixing the variable wage component results in the rate of profit of all firms becoming equal to the macroeconomic wage maximizing macroeconomic rate of profit.

This study examines how employment and wages for men and women respond to changes in the minimum wage in India, a country known for its extensive system of minimum wage regulations across states and industries. Using repeated cross sections of India's National Sample Survey Organization employment survey data for the period 1983–2008 merged with a newly created database of minimum wage rates, we find that, regardless of gender, minimum wages in urban areas have little to no impact on labor market outcomes. However, minimum wage rates increase earnings in the rural sector, especially for men, without any employment losses. Minimum wage rates also increase the residual gender wage gap, which may be explained by weaker compliance among firms that hire female workers.

This paper examines the differential effects, based on the size of the plant, of industry-level foreign direct investment (FDI) on plant-level employment and the wages of skilled and unskilled workers in India's manufacturing sector. On average, there are strong positive differential effects of increased inward-level FDI for large plants relative to small and average-sized plants in terms of employment and the average wages of both skilled and unskilled workers. Small plants experience negative effects from inward FDI, which can be explained by intra-industry reallocation of output from smaller to larger plants. After conducting a regional analysis, I find positive spillovers to small plants in Indian states that receive large and persistent flows of FDI. This suggests that a critical mass of FDI is necessary for small plants to experience positive spillover effects.

This paper uses labor force survey data from India for 2000 and 2012 to examine how wages behave over the course of structural transformation. We find that wage employment between 2000 and 2012 displays the patterns one would expect for an economy undergoing structural transformation, with employment shares shifting from agriculture to industry and services, and from rural to urban areas and larger cities within urban areas. These shifts, as well as a shift to nonroutine occupations and routine manual occupations outside of agriculture, are associated with an improvement in average wages. Finally, simple Mincerian wage regressions confirm that jobs in larger firms and big cities are associated with significantly higher wages—even more so for women. Overall, our results are consistent with the notion that policies that encourage the expansion of the formal sector and employment in larger firms are crucial for development.

Job seekers benefit from social networks because social contacts could provide useful information about the jobs and exert influence during the job search process. Although many studies find that social capital has positive effects on job outcomes, little is known about how the effects of social networks on job market outcomes are conditioned by the broader social context or how they vary by the characteristics of the network users. In this study, we specifically examine the influence of social networks on migrant workers’ wages and job tenure during different periods of the social and economic transformation in China and among workers of different levels of education. Analyzing the longitudinal work history data from the survey of migrant workers in the Pearl River Delta and the Yangtze River Delta in 2010, we found that the jobs obtained through social ties with friends or kin have lower wages than jobs found through formal job search methods in the 1980s and 1990s, but using social contacts leads to higher wages in the late 2000s. In addition, informal job searches through friends and kin lead to longer-lasting jobs than job searches through market-based institutions. Finally, a migrant worker’s level of education does not affect the wage return of using social networks during job search.

We investigate whether cultural diversity across US cities (measured as the variety of native languages spoken by city residents) is associated with any effect on their productivity. Diversity of cultures may imply diversity of production skills, of abilities and of occupations that enhances the productive performance of a city. On the other hand transaction costs and frictions across groups may hurt productivity. Similarly, diversity in available goods and services can increase utility but distaste for (or hostility to) different cultural groups may decrease it. Using census data from 1970 to 1990, we find that wages and employment density of US-born workers were systematically higher, ceteris paribus, in cities with richer linguistic diversity. These positive correlations reveal a net positive effect of diversity on productivity that survives robustness checks and instrumental variable estimation. This effect is found to be stronger for highly educated workers and for white workers. We also show that better ‘assimilated’ non-native speakers, i.e. those who speak English well and have been in the US for more than five years, are most beneficial to the productivity of US-born workers.

In this article we estimate the wage and employment effects of recent immigration in Western Germany. Using administrative data for the period 1987–2001 and a labor-market equilibrium model, we find that the substantial immigration of the 1990s had very little adverse effects on native wages and on their employment levels. Instead, it had a sizeable adverse employment effect on previous immigrants as well as a small adverse effect on their wages. These asymmetric results are partly driven by a higher degree of substitution between old and new immigrants in the labor market and in part by the rigidity of wages in less than flexible labor markets. In a simple counter-factual experiment we show that in a world of perfect wage flexibility and no unemployment insurance the wage-bill loss of old immigrants would be much smaller.

This case discusses the problems coal miners in Heilongjiang Province faced when not being paid. They staged massive protests after not getting their wages for six months. The case discusses the issue from various perspectives, the company claiming to have great debt, the workers asking for their rights, and the Chinese media reporting on labor and health issues.

Many plant-level studies find that average wages in exporting firms are higher than in non-exporting firms from the same industry and region. This paper uses a large set of linked employer–employee data from Germany to analyze this exporter wage premium. We show that the wage differential becomes smaller but does not completely vanish when observable and unobservable characteristics of the employees and of the work place are controlled for. For example, blue-collar (white-collar) employees working in a plant with an export–sales ratio of 60 percent earn about 1.8 (0.9) percent more than similar employees in otherwise identical non-exporting plants.

While it is a stylized fact that exporting firms pay higher wages than non-exporting firms, the direction of the link between exporting and wages is less clear. Using a rich set of German linked employer–employee panel data, we follow over time plants that start to export. We show that the exporter wage premium does already exist in the years before firms start to export, and that it does not increase in the following years. Higher wages in exporting firms are thus due to self-selection of more productive, better paying firms into export markets; they are not caused by export activities.